Shares of Costa Mesa-based clothing maker Volcom Inc. slumped Friday, a day after the company reported disappointing second-quarter results and offered an outlook for the current one that fell short of what Wall Street had been expecting.
Volcom’s shares were down 15% in afternoon New York trading to a market value of $400 million.
On Thursday, Volcom, which designs clothes inspired by surfing, skateboarding, snowboarding, music and art, reported a second-quarter profit of $68,000, down from $872,000 a year earlier and well short of the $1.2 million analysts were expecting on average.
The company’s profitability was impacted by higher selling, general and administrative costs, which rose 15% from a year earlier to $29.7 million.
Volcom cited higher marketing expenses at stores that sell its products for the rise in costs.
The company also offered retailers what it called “incentive pricing” on its clothes as a part of a bid to gain market share.
Revenue came in at $62.5 million, up 15% from a year earlier and on par with Wall Street’s average expectation.
For the third quarter, Volcom offered an outlook that fell short of what analysts had been expecting.
The company said it projects a profit of $11.5 million to $12.5 million, below the $15 million analysts had been forecasting.
Revenue is seen coming in at $102 million to $105 million, below the $106.8 million Wall Street had been expecting.
The company cited retailers that remain “cautious” and production issues in China that stand to delay the shipment of winter clothes.